tv Tonight From Washington CSPAN October 9, 2012 8:00pm-11:00pm EDT
>> the vice president of banco santander from one of the world's largest banks said that spain is making positive steps to get back on non-fiscal ground. this is an hour 10 minutes. >> when they welcome all of your today's her peterson institute for international economics. the crisis at the euro continues to be at the center of the global economic agenda. spain has now moved close to the center of the crisis of the euro. the spanish banking system is obviously a critical part of the
economic questions facing spain. and banco santander is knowledge the largest leaving vague, but in the liguria. i think we have an ideal speaker today to address a whole series of problems that we think about in the context of european crisis. a representative of the bank alleges that the ones hand in the middle of the spanish banking system. at the other hand, is the largest bank in spain spain and one which by any measure is solid vr approach and therefore in a very unique position to give us an appraisal of both the spanish economic outlook and particularly the prospects for the spanish banking system and how they may be addressed in order to resolve the spanish crisis in the european crisis were broadly. our speaker spent a number of
years in the spanish government from 1977 to 82. he was an active participant in the negotiations for spanish entry to what is now the european union, the european economic community. he also participated in a number of spanish negotiation then they got, not wto and with the european union and spain a century into the union after democracy was restored in spain and spain was welcomed into the european community process. in the last year at this government coming was minister of the presidency, played a very essential role in the entire spanish government situation. shortly after he joined banco santander and has now been there
for over 20 years. he is now vice-chairman of the bank, member of the board, also member of the board of banesto, banco santander in portugal, a member of the board of a number of other financial companies in the group and is president of the print of the foundation and spain. i think we are uniquely privileged data to have a speaker from banco santander with its unique ability to see both the spanish situation, the overall banking situation in europe and to do so for a position of great strength. so, mr. roderigo and see her today, it is great to host you today. we look forward to your remarks. [applause] >> thank you for your very kind
presentation. ladies and gentlemen, it is for me a great pleasure of great honor to grace these very distinguished audience and i'm very privileged to participate in this meaning of the foundation. so thank you to you all for being here today. throughout my presentation to concentrate on what i considers the key points because you about the material with you and so you can look at it whenever you think is useful. so i will concentrate in some aspects. first of all, everyone knows and the world there is duality developed and emerging countries. but let's say five business days to understand what is going on in this duality that yesterday
for the imf have already underlined how the world is progressing and away the mature economic and economy as we have it pretty sound situation. well, if you compare what is happening in the u.s. in terms of the design of the framework of my economic policy, this is a totally different vision. in the u.s. you have the degree of flexibility. it's ready to intervene and to apply a very flex ability monetary policy, wearing europe the process is very cumbersome. it is a process in which the decision-making is extremely complex and we lack a proper lender for sovereign ends. this is the root of the problem
today, that we have to apply fiscal policy, but we don't have a sufficiently policy. i would like certainly a lender of last resort. there is a situation for and stability in the sovereign that markets an example for that, in this chart you see the spread of the government that equally compare with germany and the spread is nearly 650 basis point. as you can all understand, it is impossible to work within a monetary union with such discrepancies between the core countries to finance themselves
in european countries in this case, we have to pay on top of 400 points today in order to properly fund. this creates a number of problems because obviously this between the sovereign debt spain, that means it would translate the monetary policy, we are having spreads for customers then compared those in germany or france. this is a huge advantage. companies will have to compete with the rest of europe. well, europe is trying to solve this question. the way to solve this question to the banking unit and one of the results of their recent back
in june was precisely to try to establish a banking unit under warranty asking, trying to get out of this connection, with the banking policies. but, you look how this is going to affect in spain. in spain we have both a domestic problem as a result of a large increase in the private and public debt and the heirs of the expansion of the spanish economy. but once we enter into the problem, we have this coupled with the lack of europe had mentioned earlier. he is an economic situation as a result of the need to regain the competitiveness that spain lost in the first 10 years of
economic union and then to have to address the problem of the site you're an then you have to embrace the problem of the financial sector. and i will go into some more details later of these elements. well, the process of the spanish economy in terms of the gdp, it has a very important impact. the spanish economy, was very significant over the first seven years to dedicate. i mean come with the growth of the economy and suddenly when the crisis arise, we have a very big decision and then we have a kind of double dip of the economy that now, according the economy spends in the region of 1.5% per year and the imf for
the next year is also an additional decrease of gdp in the region of 1.2 cents. if you compare that figure rose to in terms of growth, the spanish economy was outgoing. the first seven years and then afterwards there was a clear underperformance in terms of growth of the spanish economy. well, and trying to address economic problems, the government is taking some issues that in my view such as pension reform, delay in the retirement age to 67 years and very important labor reform that this is the question of the rigidity of the labor market in spain. that is one of the reasons by the spanish economy gets the
highest 25% we have today. this is the will of god is that labor market. the government has done a great job in trying to give labor market. then there's been financial restructuring to create reconciliation of the banking. in terms of the financial restructuring, to extremely important. in spain we have the dual financial, where on one hand privately owned the mustard in the market. you do have 50% of workers saving banks. they have a very poor government assistance, very much political influence in their appointments to their government unit pact and too much concent real space. there were the problems
happening today. as a result of these financial restructuring, we now have banks. there have been restructuring in the capacity and in the process of burning jet team capital, we think that the combination for this week segment of restructuring will have a very sound and competitive financial sector. this is one of a positive outlook for the spanish economy going to hunt. another positive elements besides this restructuring for these reforms are the factor that has spanned very specific in terms of the story says you see here but the other countries
of the euro zone and that the average of the euro zone, recently. that means that the countries regaining competitiveness that is shown in the above bullets support and a very important element, that were making a boost competitiveness in many years. if you've seen this chart, something with the year 2008, we are recovering competitiveness through the lowering of the unit labor. so we have a picture that we are trying to raise the fundamental problems through reforms at the same time, these reforms are having a positive impact in terms of regaining competitive business for the economy. another important element is a private set her deficit.
wow, another important reform has been to put into the constitution, a financial stability law, that means that the government is going to be more able to meet their objectives and to put a degree on the expand says and the deficit of the regional suspense, which is part of the issue because the expenditures from the central government, another part of the government in which you have tools in order to make them comply with your objectives. at the government has proper tools. and in the process of the fiscal situation as we see in this chart, we have a totally out-of-control deficits in the year 2009 with a deficit exceeding 11% of the gdp and now
we are to reducing the step thursday of the very important issue and what the markets wonder if the capacity of the government to get to the 6.3%. there is a degree in the market and the capacity, but the government is confident that she can get this figure and i think it would be a very important message for the market. if it's able to comply with the objective of direction and private sector. that means for the 6.3%, makes 4.5% of the go into less than 3% the year after. it not going to be easy because when you have the economy in an environment, it's difficult to reduce expenses because a lot of expenses of liquids and economic
situation that one related to unemployment benefits. in terms of the financial sector, we have to address a problem of pressure, sending, a problem of capacity and a problem of governance and transparency. most of this issue aren't linked with the savings banks. by definition, they were operating with a degree of concentration with real estate, but there's a lot of albums for these things. in terms of funding, there was working with a stronger to touché and with the capacity in the course of 10 minutes a weaker segment of the sector was much more effective to as a problem throughout the system overcapacity. this is at the overcapacity in the spanish financial site are we'll be in the region of 30%. in this problem is going to be
address because as a result of the injection of private sector money, the process is going to take in terms of their restructuring of the sector and is going to alter banks that have been the objects of private sector money injection to restructure in a very aggressive fashion. i'm once again, in the corporate governance, the fact that 250% of controls pretty much influence political aspects, transformation to banks of these institutions and having some of them are most of them listed in the market is going to address this issue of corporate governance. some of the debates of their restructuring of the financial sector and even more so, it is in very detailed element.
this element is very important, which is what the ammo you signed by the spanish government with the european union, that allows for the injection or a spanish bank. there were a number of compromises by the government. one of the most important being the parts of the system had to go through a process of stress testing, with an exercise top down and been done in a very independent fashion because we have enjoyed the participation of the imf and the european union. so it was a very full comprehensive hypothesis in terms of this scenario does she see in this slide are putting
ourselves in the position of the economy for a 1%, which is not going to happen. certainly next year 2.1 decline in the year 2014 or .3%. i would decline to underline another important point of an unemployment rate going through the roof through 27% and prices decline and close to 20% a year, 4.5% next year. very tough scenario. when you analyze the impacts, you end up with the figures that have been recently published and which in the region of 25 billion euros of capital and spidered these very diverse
scenario. you have on the other hand a number of banks, formally banks of the exception of a major run the required according to this exercise 64 billion years. the only exception of the commercial, formally commercial bank needing this kind of hope is launching the right issue, with an amount of 2.5 billion euros and will overcome all these capital requirements by their own means. i going with no government help. that means that this crisis in terms of the additional capital within the region of 40 to 50 billion euros, which is an amount in terms of the gdp, which we are talking between 405% of the spanish gdp, which
is an unsurmountable amounts. that means that regardless but this injection of cap it all, it has been done directly to the government. or injected into the bank, in which case it's not adding to the government. we're talking 4%. there's a number of discussions where this money is subject it into the government or into the bank. but at the end of the day, regardless of the capital we are talking about a very large amount in terms of the gdp. well, let's not end up with this analysis. obviously it has to be very resilient. you see the profit of the banks
with the crisis claiming and reaching his first semester and you have a record with 12.5 billion before the very resilient, the diversification. the fact that we have a system at a stand alone subs serious hypertext through firewalls the bank if any systemic crisis would happen in any of the market in which we operate, we are retaining focus that we are not in the issues whether we have to differentiate our investment for banking act cavities for the rest of activities because we are mostly a radio banking operation, so we have to did last or change your way of doing business.
have a strong base of capital now and we have a good efficiency and rich culture. it is but i mention. the diversification of our group in brazil we saw 26%. and mexico 12, another latino country 6%. that is all for% in the emerging market. we have roughly speaking half of our earnings. the rest diversified in countries such as the u.s., u.k. or germany. that means diversification is their kiosk pectin understanding under the resilience against the crisis. the fact of having a decentralized city area, means
that if any crisis were to happen in one of the markets in which we are, we are able to have a firewall around this element of christ is, affecting by the investment in those countries but that the spillover impact. when we present to the bank of spain, we underline the bank of spain, as one of the great bear. they standalone independent said series. with the fact of having the banking operation with the largest branch of the world give us access to stable liquidity dependent on financial market. we find ourselves basically the
banking obligation, another interesting feature. to the extent, it is likely about 100% of 170%, which is practically funding our assets and with a very strong position, according to regulations of 10%. in terms of efficient the, for retail banking operation, you chart how if they are sent under there, and makes us extremely competitive bank in which you do operate because in times of crisis, also the fact that we have an extremely efficient bank, spain -- throughout this. for us, we have a model of rich
management. its unique and sometimes there is a structure in which it is totally independent from the business unit and myself as bad of the report, a report directly to the directors and i chair twice a week at a meeting to analyze risk policy of the bank but five members of the board. it is their decile is very well. just a computer, most willing to try to answer this presentation. we think the sector faces the challenge economic environment. so some of the suspects of the implications are not affect in
some thing due to our business and the. europe is in a critical point no doubt than we have in europe to put in place a proper mechanism in order to address the issue of sovereign debt and the recent approaches by the european central bank and misdirection that provides this report for the sovereign debt and the euro zone, which is critically looking forward to a proper structure. the european banking union will be a significant step forward, but i think it's going to take time to have this in place because to change the 6000 banks in europe, there are some questions as to the ability of europe to put in place a system
that provision is announced before the start of next year. spain ascenders of your adjustment, but there are many positive elements in terms of the structural reforms being made, so i am optimistic that spain is going to be able to handle the problem of the private sector as it is handled the problem of external debt prior to the crisis went to size 10% of the gdp and at the end of the of is going to be 1.5 percentage point gdp. that means the adjustment we have made in the external factor, i think were going to be able, with the spanish debt. i'm also referring to something
there, i think sometimes they are the crisis has been due to the elements that it then outlined earlier. basically the business to be very in the direction of the banking operation, very focused on that. they're not activities of working and markets where we have a definite competitive advantage. thank you very much for your attention. i would be more than willing to try to answer your questions. thank you very much for your attention. [applause]
>> thank you very much for the very comprehensive presentation. you raise lots of questions and i'll try to follow up on a couple myself and then open up to the audience to like to ask one question about the overall economy of spain, one about the banking system and one out there. what is your most important charts i thought showed the comparative evolution of unit labor cost in the major european countries, including spain. and if i interpret this site correctly, you show that spain authority achieved an internal devaluation of about 10% over the last three years. one question is, how did you do that? the next question is, how much more is necessary because there's still a gap of about 10% between spain and the euro average germany, which i guess people have to try to approximate to eliminate the internal imbalances within the
union. so really, two questions. how has the internal evaluations so far been achieved? how much more is needed and how do you get? >> well, in fact, when you look at the rates for an appointment spain, how they went sharply up for the crisis, the possible development is that we are regaining competitiveness by definition. it has perhaps cost us a lot in terms of social unrest and questions related to labor markets. the development of the capacity of restructuring of the private sector has been extremely, extremely positive. it's been a moderation in the labor cost because of this active way that we are managing union and also because the fact
that the economy is in a very weak state means that the demands for increases are not the evidence in this number to the market. while the fact any time that she make this kind of situation, it costs you a lot of increase unemployment. this new regulation in terms of labor and future cycles, you are not going to witness the sharp increase unemployment of the economy. so we are still having to move in the direction of reducing the imbalances of europe. we're in a good trend in the expectation mystery combination of wages in the central european countries, mostly in germany after a moderation in spain we are going to achieve fiscal of
competitiveness. the resilience of this sector in spain is remarkable. spain has lost the markets throughout the crisis in experts. on the charts show how we increase our export much faster than the average euro zone. >> even faster than germany. do not guess, that's correct. the spanish competitiveness by definition come into the increases of asked for. wow, this is maybe in my view the diversification of the last corporation. i mean, you look at indicated and the earnest of these 35 largest, close to 50% out that in spain. that means that in spain today,
we have any sense provided the the corporate like electric utilities are well diversified for the economy as a whole. >> that may turn to the banking system that you address. your remarks are very comprehensive, but there is one thing you did not mention a to s. do about. there's been a lot of concern about a kind of rolling bank run in spain from spanish banks. how serious is it? is it continuing? >> if you look to run figures, in fact we have increased in spain over the last 12. so i mean, it's been very
positive. but if you look at the economy a soul, 11 of the remarkable asked to, not spain, but the chairman of our bank, which i followed very closely, it is a remarkable retain deposit in those countries. both in spain and portugal. the reason for that is first of all -- second, there is no kind of definite movement in this direction. i think it was a few weeks ago to reconcile the figures of the public than the ones mentioned publicly come to reconcile with the real impact and to figure we are talking about in terms of balance of payments is in the region of 15 billion years, which is something insignificant
three. of one year. so my answer is definitely, there is not a movement that led to spending because it. and also, the figures have been not inside by the fact that there is a transformation of traditional deposit into a kind of commercial paper. when you look at the figures, it appears that they are going down, but it's been transformed in the instrument similar to the deposits. so you have to look very attentively to realize there is no such thing as movement away from spain. >> okay. and thirdly, a question about santander. one of the secrets of their success was diversification taken into emerging markets. your chart showed the decay of the diversification, indicated
as you said 50% of your assets, your profits i guess we're in emerging markets. the chart showed virtually all of that was latin america. the question you apparently have not moved very much into asia. is that a deliberate strategy? or will that change in the future? and if so, why? the obvious cultural relationship and maybe that's the end there. publicity conscious decision not to enter emerging market beyond latin america and will not hold in the future? >> well, we are disciplined an our strategy. banking is very important. first, to have a competitive advantage, to know what your core competencies are and to have markets and make 30 years experience in retail banking, we
have very fundamental questions. you have no critical mass and you cannot afford to have all your proper systems, proper management capacities that is very, very small and you lose competitive advantage with the local competitors. so we don't have these elements. first of all, we have no competitive advantage. in latin america, but certainly not in a shed. it's very difficult to have a critical mass by definition in the asian markets because our very large market is is very difficult for the element implications with corporate control of those things. so we don't feel that for us it would e. the logical movement. it's more to establish ourselves at the banquet one we have in brazil, india or indonesia or china. what we are trying to do, it's
obvious that the region is fast growing and is bound to have very important implications in the future, is to profit from the flow between europe and asia and asia and latin america. we provide us with unique opportunities to profit for finance, for direct investments when you have the customer and can provide opportunities. going into a traditional presence but the domestic bank in those countries. >> thank you, much. the floor is open to question. discredit traveling night, a standing mike in the back. identify yourself and fire away. >> thank you very much for an interesting presentation.
i want to follow-up on the last point here about your strategy because it appears to me that it is not the bank that i saw most bang, big banks. and if i've got the details right, we've got in moscow and the debate ipo in mexico they appear all you have banks in poland, could you elaborate on this? if they are moving towards eastern europe, but concentrating to europe rather than going out and lined with your answer and asia. thank you. >> in the case of poland, we had the opportunity to buy into sting operations to provide us with all the elements that are for us a fundamental strategy,
to have a competitive advantage because we have already poland cooperations, so they knew the market in germany we have operations, so we can have access to all the structures necessary to have this competitive advantage. so also in terms of diversification can we move to another market. in the case of russia, we didn't have critical mass or competitive advantage in the market who decided to go out. the ipo in mexico follows our idea to have our subsidiaries in the market because these providers with the following advantage. first of all, market pressure under management because the management has to deliver.
those are in terms the market. so they have to have quarterly results to answer investments that we think this pressure. the fact that we need to have those cases, independence is also very positive because it gave us the balance. and in terms of enormous opportunity to raise capital come in the areas we think is more favorable. you think that is something many for whatever reason to raise capital now in spain in the middle of this economy crisis. the kind of dilution would be very significant. whereas if you sell 25% of mexico by investors is very considerable to the extent was large city subscribed, gives us access to capital without
diluting in the markets and the fact the case of mexico, we were able to burst our core capital by 49 basis points. so you see a very efficient way to access cap it off with a bang to have a very strong cap will be fundamental for business. >> bob samuelson. >> i rated for the "washington post." you did not mention the ecb and i'm just wondering, when you look back on the craze says, does the ecb bear any responsibility for the crisis? were there things that did that shouldn't have done and things that didn't do that it should have done? >> well, i have a general comment about the instruments of macroeconomic policy in any
given market. when you are having a restrict to fiscal policy, the logical compensation reflects policy and byways but it happened in the u.s. and the u.k. so i would welcome a policy in europe to be coddled with restrictive policy. but is the european center? i was the european central bank regime of this issue? i think is doing a great job. first of all it is operated it is operated banks. injecting 1 trillion banks. injecting 1 trillion euros in this time. that means that the proper role of the central bank has been in there. and in the role of the european central bank has addressed the issue for a framework that has been announced prior to
september. when he defined a framework in which the european central bank would be willing for whatever amount of sovereign debt would be required in this market according to the rank able to provide, the efficient way to do it, that there were some operations also been the primary market. this operation cannot be done by the central bank of salt, but on behalf of the europe and france, once you have in place, you had to double capacity to operate in the primary market. there is a condition for that. this is understandable, too. once you have set in place a policy in the market, you have to be sure that the countries
are born addressing the fiscal issue. so the conditionality is one of the causes they are. so countries have to add that the intervention and the european union has to accept a system of conditionality. this is a very clear framework to the extent that operationally is providing some booze for sovereign debt, that the spanish spread on the gear was as high as 650 basis point. that means it has had an impact. is this impact sufficient enough? well, in my view, the logical spread for the spanish to, given the macroeconomic fundamental region of 200 basis points, better than in excess of 400.
so there is some leeway in order to go into the direction of a normalized kind of sovereign debt provided that the government in spain at the end of the year gets to the objective is 6.3% private sector was be a very important step in the right direction. >> let me just extend that a bit if i could. your experience in government as well as they are. what do you expect by way of timing now in terms of the prime minister's request for this program to go into effect? therefore lending from the ecb to take place? how do you see the next steps unfolding once things roll in the overall financing picture.
>> first of all, that is not so much market pressure we had a number of weeks ago in the sense that the market for this spanish foreign debt are pretty stable in the last few weeks. that means the strong market pressure, in order. the possibility of the government and the shorter and hides no pressure in the market to the chorus of the debt. that means we are in a position in which the government has said are alleged to reach his feet with the kind of conditionality to the package first of all. and second, what would be the likely reactions in europe once you have to set this issue. i said yesterday the minister of
finance that germany has stated that in his view, the spanish government does not need to require these kinds of intervention at the european central bank and he believes to provide the market by complying with the objectives of deficits. so you have not the pressure in which the government in spain expects the conditionality should be clarified and is very prominent member of the european union, stating that it does not require to go to the systems. so this is the scenario. >> do you share that view yourself? >> that's why i think provided that the markets to address the issue, the best outcome is not to ask for this. if, and this is very important, if the conditions of how to use
the private sector are not these conditions, the government is able to comply with that and these will clarify the situation with the market. this is very important question provided that europe is able to insert a very important factions to demand that would be asked from spain in terms of congressional debate. what kind of conditionality is fair. it is important to meet the objective for deficit. you need additional reforms. there are questions that have been discussed from different constituencies, many different industries. so it does not clarify. when things are not clarified, the best position estimated fee. >> next question. >> this is on somewhat a different now, but i think it's
relevant. they're once again raising her head, asking for even more autonomy. to what extent will that be successful? and to what extent will that influence spain's relationship with the ecb and the other parts of the e.u.? >> well, this is a situation in which at the end of the day, the government has to come by with the constitutional requirement and the leeway in which the government has removed. there is a way in terms of the financial implications. there is a need to have some other though it be discussed so there's been some adjustment in that.
so i mean, i hope that the outcome of this process, once the elections are over are linked more to the financial structures into any other constitutional issues. >> but how will that complicates spain's relationship with the rest of europe and particularly economic support from the rest of europe? >> i don't think that at this point in time there are any advances being challenged yet so i don't see any and for this relationship to be changed under circumstances. i don't see any reason for your tv can earn. i mean, it has not areolas.com. >> question appear. >> hi, nancy donaldson with the ils. i am curious about what you would say about the youth unemployment situation in spain
and what is the role of the private sector in helping to tackle these issues and especially companies like yours and others in a better position than done. >> i'll start with the last part of your question. a number of persons that could work in the bank, and also our young people to be employed in companies with the assistance, so we have a part of this effort in order to address this issue, which is a very negative issue because we are talking about youth unemployment and the spending goes to 50%, doubling europe. and the answer to that is linked, once again, to the labor reform unless the economy start speaking up. now we're in the process and the cost they need to regain
competitiveness. so we're in the process of adjustment. i think that the new conditions in the labor market are much more flexible, said the companies are going to be more reliable to employ more people because the conditions to hiring people are not penalizing us much is in the past the companies for doing this. so it was hating people because if you get it wrong and at the end of the day, the cost of work is prohibited. sue at the end of the day, was a problem of the labor market. one important issue for the year is this the rigidity of the labor market. every time they entered, you had the unemployment rate going through the roof. that means that you need to
address the issue of the labor reform. this issue has been a just for impact is not there because it is required first of all the economy is growing again amongst the economy grows again, you will see a labor market more normalized. so having a kind of more flexible situation that needs to have in the past. so the structural issue has been addressed by the government in a very positive fashion in my view. >> thank you for doing this. the latest ecb action has some time for heroes on reforms. how long should we wait to use dede huge liquidity translating into funding to use all and medium-sized businesses? and what would be in coming
years with so much austerity still going on. thank you. >> well, it is strew do you look at the numbers add up to very recently was posited in the europe central bank. so the objection was not that important. well, the europe central bank has this issue by paying nothing to their deposit when you deposit back was a move in trying to get this liquidity back to the market incentive posited in the european central bank, which was a good move. but at the end of the day, the liquidity has to provide the companies through this cycle of deleveraging. there are some countries to do the bridge. so it could be something very awkward to ask the companies to do that bridge.
so there is one question that has to be addressed once the prices of deleveraging the other end in what instances the economy would yet fundamental question in europe as a whole. but there is another interesting issue in europe. we need the german economy to grow faster. so the issue of europe is according to the latest report of the imf, the economy germany's going to grow. imagine if you are concerned that the u.s. economy growing 2.1% next year, 0.9%. that means signora, the engine of the german economy to reverse the economy. this is related to loans, related to growth of the economy
would be more to the countries of the process of deleveraging is not an issue, rather to the countries to have this deleveraging need to be held by the stronger economies in europe. >> you mentioned in your remarks a couple time banking unions in europe then you stress it portends, but she also stressed it will take sometime to get get it underway. could you elaborate on that? which parts of the banking unions do you think most important? is a movie to mutualist deposit insurance? is at the supervisory network? which elements are important? talk a little more because we did talk about it properly over lunch, your view, i think that the european wide banking unions should supervise the systemically important banks, not all the banks simply because the latter is such a practical
>> so, periodically, it would be more practical. the larger banks in europe, his condition would be easier to combat been moving towards a thousand things. but the implications and the point being taken by the european commission is that we are making something through this, because at the end of the day, what created the price prices in europe -- never the saving banks and spain, ever the mortgage banks.
if you do this provision, you are missing something. so there arguments for both sides. the future of the system as has happened in the past with the smaller banks. >> okay, randy? >> thank you, i am randy henning at the peterson institute and american university. fred anticipated my question when he asked about banking unions. i would want to ask if you could elaborate a little bit more on the structure the would like to see poor supervision under the
arrangements that are not being discussed, of course, it would migrate from the bank of spain to the european central bank. in the first instance. could you talk a little bit about how you feel about that? secondly, what you think should be the division of labor between the ecb on the one hand and the national bank regulatory authorities on the other, and the european banking authority. >> a position that is very clear is that we are in favor of this movement. when we are helping move forward the focus, it is extremely important to create a level playing field in europe.
in matters related to the safety of the system and for matters related to the proper rules of competition within the markets. i'm definitely in favor of this movement. there are issues about the smaller loans, the analysis, the inspectors of the national supervisors. when we are dealing with elements related to the comparability of systems and stress testing for the eurozone, i think that the road can be seemingly important. you cannot have the european central bank dealing with minor issues. in terms of having the proper
rules and the banks in europe and the systemic implications of any bank on how this would affect the quality of the financial sector. >> thank you. >> you talked about to point related to the fiscal deficit. my question is, what happens if it turns out to be seven points, somewhat higher? what happens not only in governments but in markets? >> well, i guess that be a disappointment, obviously, in
terms of the markets and the government. because the markets are planning to meet the objective. so it is more a matter of credibility than a matter of proper impact on deck. what we are talking about is not a huge difference. it is a matter of credibility. once we set an objective comment we have to meet the objective, otherwise from the markets are not going to believe you and the implications are a matter of credibility. a matter of this being a fundamental question for fundamentalist implications if you overcome the road in presenting the point. i think it is very important. if you want to overcome the image comply with the objectives
which can elude you to this. obviously it would be the most adequate way to deal with the questions and taxation. this is very important. >> okay. >> the president of the united nations and the finance minister talked about currency wars. inflationary pressures are going, growth is low, and we talk about the industrialization. you talk about are they going in the right direction? >> as you know, a couple of
difficult quarters in terms of growth. by now, i think the markets are convinced that we are going in the same direction as the economy is going to go in percentage points of gdp next year. could be a decent rate of growth in the economy. i think that with this, you will have perceived growth. we are not talking about the sustainability of the next higher rate. in the case of brazil, they have a huge investment. and the markets are able to stay
positive. you know that very well. we are willing to invest in the country of the infrastructural implications into the future. through the financial sector, it is like loans as a result of the growth of the economy. but we are holding them accountable for this will be a position without further complications of that. so we have reasons to be concerned about the financial sector of the country, that i've definition is very strong. we have a strong competitiveness and brazil. the banking sector is strong.
these are the sort of things that will grow the brazilian economy. they have a very competitive process. >> will [inaudible name] be playing a big part in the next olympics? [applause] >> this is a matter of good times and we will keep it that way. [applause] >> okay. >> thank you, first-come i would like to thank you for your presentation. it is in contrast to some of the headlines that i mentioned before. so the independence of the capital of the subsidiary committee mentioned that there is a firewall. the main bank has a control
chair of the different subsidiaries and the shares of banks, if you can further clarify that? >> sure, we would like to have subsidiaries in terms of capital and series. >> okay. >> it is there without having to refer to a banking company. this creates a number of firewalls, because at the end of the day, you were to have worked out a problem. it can be very difficult with these subsidiaries. so this system, we think it is extremely fair.
we are competing in the same way with competitiveness and the same rules and terms of compliance with the local requirements. additional competitive advantages. through the different brands for different countries in which we operate. so we are in terms of capacity and operational assistance, in terms of capital, it really did. the financial implications, we want to keep them properly independent. because the minute you show this to the environment, one of the
companies where we operate, we were able to live in a very good place. otherwise we have implications to the market. there were a number of issues of the systematic implications of the local crisis. so we want to protect this around each of the banks that we participate in operate. okay, are there any further questions? >> if not, thank you mr. matias rodriguez inciarte for a very clear presentation. we hope that your optimism is right. i personally share it. not everybody here does, but we will do the best we can. think forward. thank you very much all you have done. >> it has been a pleasure for me.
to work with such a distinguished group. [applause] [inaudible conversations] [inaudible conversations] >> see the only vice presidential debate thursday night live on c-span and c-span radio, and online at c-span.org. watch unengaged. coming up tonight on c-span2, a discussion on the foreign-policy plan laid out by republican presidential
candidate mitt romney. then, how speaker john boehner contains for mitt romney in new hampshire. that is followed by a former president bill clinton campaigning for obama in las vegas. >> 13 years ago today, c-span radio was created by the cable tv industry is another way to access our public affairs programming. you can listen to c-span radio in the washington baltimore area at 90.1 fm. on xm satellite radio, channel 119, were online at c-span radio.org. now, you can listen on your smart phone with the same c-span radio app for iphone, blackberry and android devices. >> on tomorrow morning's "washington journal", look at the upcoming presidential debate. our guest is frank donatelli.
chairman of the a group that trains republican candidates for office. in the video of mitt romney talking about the 47% of americans that mr. romney says don't pay taxes. and we will get medicare's growing costs with emily etheridge, a health care reporter from rational quarterly. "washington journal" is live everyday at 7:00 a.m. eastern on c-span. >> will do with the president obama did for the budget. nothing except for borrow and spend. our credit rating was downgraded for the first time in our history. >> we laid out a 4 trillion-dollar debt reduction plan over the next several days. $4 trillion. ladies and online, these guys go
against everything. no, i really mean it. not only do they say that they don't like our plan, i get back, you don't like it. but what is your plan? >> thursday, congressman paul ryan and vice president joe biden face-off in their vice presidential debate. you can watch it 7:00 p.m. eastern. both candidates on screen the entire debate. i'll live coverage on c-span, c-span radio, and online at c-span.org. >> a discussion on mitt romney's foreign-policy plan and the foreign-policy and how is paying in the presidential election. from "washington journal" promises 40 minutes.
>> mitt romney made his foreign-policy speech yesterday. did you hear anything new? >> guest: you know, this is an important speech for mitt romney. it was also, i think, the third important foreign-policy beach in the campaign. people are paying a lot more attention now that we aren't within days and weeks of the election. what he's trying to do is what many try to do. he is not outlining how he would run the country so much as he's trying to contrast with obama. >> host: what you think mitt romney did well in discussions
about the economy. >> guest: there is also a live debate when it comes to foreign policy. he is a one-man show on foreign policy. he has people to work closely with the bush administration, representatives there is a classic republican establishment, what we would think of as liberal international. clearly he is coming down more on the side of what we think of as the second part of the bush administration, which is to say he is embracing the idea that there is rule for american values.
>> host: if you would like to join the policy about campaign 2012, or is the number to call. democrats, (#20)258-5380, independents (#02)585-3882 let's take a listen to mitt romney, yesterday, outlining some of his foreign-policy ideas. >> i want to believe him that the tide is receiving more than anyone else. with extremist on the mark and our ambassador dad, i know that
the president hopes for a more prosperous middle east wind with us. i share this hope. we cannot support our friends and be our enemies in the middle east middle east wonderworks are not backed up by aids. when our defense spending is being arbitrarily and deeply cut and we have no trade agenda to speak out. and the perception of our strategy is not one of partnership, but opacity. >> host: it garnered a headline yesterday. hope is not a strategy. how much of his speech was against president obama and what he has done and how much was laying out his own trajectory and agenda? >> guest: well, i think in his role as a challenger, this really is about a critique of the obama administration. that is a common topic of calendars.
the critiques of the president public foreign policy. there are differences between obama and romney when it comes to foreign policy. those are subsequent. much to the surprise, even some of his own advisers at the time, but rather than backing away from he has continued to emphasize that and say basically that he has emphasize -- emphasize that descending supplies into afghanistan, which has become a significant issue.
we're example, >> that is a serious difference. there are others as well. for example, how to stop iran from producing a nuclear weapon. it is not entirely clear. it is pretty hard to tell. >> host: good morning. we have a caller joining us. >> caller: how are you doing? thank you. i definitely agree with the lady talking about the foreign-policy
issues. because i think that mitt romney is an opportunist. benjamin netanyahu on foreign policy, obama is actually steadfast -- you know, you talk to benjamin netanyahu on the phone for hours, so it's not like he has been dodging them. he talks to them, you know, like a leader, just like obama held in his head up high in the debate and he didn't have his head down, looking down like everybody said that he did. as far as the media, i think a lot of people just kind of took and followed with the media was saying as far as what he was talking about. what the media was talking about when he said that obama didn't
hold his head up high. i think he was very presidential , i think that he was very calm, i think that mitt romney was desperate. >> host: we will get the candidates to debate on policy specifically in the coming weeks. but can he reflect on the earlier part of what he is saying? >> guest: yes, clearly, one of the common questions. i think romney is determined to make a trip to europe and israel and then to london where he criticized the preparation for the london olympics games. he went to poland, he went to israel, the democrats have tried to emphasize what they see as romney's penchant for gas, romney is not a scuffle with the subject of foreign policy. and diplomatic in his initial forays into international affairs. at the same time, i think that we do see an inconsistent critique of my colleague as we see on the website yesterday,
when it comes to romney and what democrats are saying about him. on the one hand, they call him flip-flopping when it comes to his foreign-policy issues. on the other hand, they say that there is no real difference between him and obama on major issues. yet, they are suggesting that he is going to be the first bush administration and here and there, i think you have a little bit of every possible critique being late on mitt romney when it comes to foreign policy. in part because his views are so unclear, it's not clear what kind of a form policy president he would be. neil: let's listen to how this is coming into play. this is from an obama tdi. talking to some of the issues. >> i'm barack obama and i approve this message.
>> "the new york times" said that romney is knee-jerk response showed an extraordinary lack of presidential character. if this is how he handles the world now, think of what what he might do as president. >> host: on the campaign trail. in fact gaining traction of people paying attention to the foreign policy of these candidates. >> guest: you know, i think that is a very important question. first of all, you could take some of this because before the convention, i believe the number was 4% of the number of americans who said that foreign policy was going to be the top issue for them in deciding their vote in this presidential election. in the last few weeks, that number has gone up slightly as a result of the attack at the u.s. conflict in benghazi. and the attention of where does al qaeda stand and what exactly
has position in this reinvented issue. the numbers have gone up. but we are talking in the single digits. this is not necessarily going to be the decisive issue in the campaign. i think it's important to remember that. >> okay, good morning. >> host: we have another caller on the line. >> caller: i have a couple questions. romney is speaking to ambassador in libya. the fact that they have the security company asked for security, the direct result of the state department and ultimately the president of the united states and the security means nobody is ever held responsible in any company. he wouldn't know who made the decision not to send troops and
anyone working for a government overseas needs to have our full protection and care of government behind them. that is an abject failure, i hear you speaking about it and addressing it. >> guest: mitt romney commented yesterday that this is part of his foreign policy speech that he laid out in virginia. >> host: let's play the clip now. >> they are expressions of a larger struggle that is playing out across the middle east, a region that is now in the midst of the most profound of people in a century. in the fall onto this trouble can be seen clearly in benghazi itself. the attack on our conflict they are on september 11, 2012, was likely the work of forces affiliated with those that attacked our homeland on september 11, 2001.
this latest assault can be blamed on the reprehensible video. despite the administration's attempts to convince us of that for so long. the administration has finally conceded that these attacks were the deliberate work of terrorists. they use violence to impose their ideology on others, especially on women and girls. those who are fighting to control much of the middle east today to wage perpetual war on the left. >> host: susan b. glasser? >> guest: on one hand, romney was criticized for his initial response. he had a very partisan critique of obama right in the middle of the unfolding of events. then he backed off as critical. he did not really suggest anything in particular that he would do differently with regard to what is clearly a very unstable situation. that being said, i think the caller reflects an important point of view that is out there
and one that obama and romney to reflect, which is the questions about al qaeda and u.s. national security is really what american voters do care about. they may be less concerned about what is happening with the new constitution in tunisia and it is an important moment. but they are certainly concerned if the instability of this upheaval gives rise to new governance. which allows al qaeda before us. arguably, that is exactly what has happened in benghazi and parts of libya. libya is a new semi- failed state. it doesn't have this. on the specifics of the incident, there isn't a official investigation underway, the state department has launched an official accountability review
board. early into the investigations, so we don't have the full picture even now of that occurring, but there is no question that this is a major tragedy. it is the first time in more than two decades that we have lost an ambassador in a situation like this. it is definitely something that they are taking seriously. >> host: susan glasser is editor-in-chief. let's focus on the independent-minded. >> caller: hello, how are you doing? >> host: good. >> caller: jobs are going to be the most important thing in the election, but foreign policy is also going to be important. as far as governor romney not putting up the specificity of what you do differently, i disagree. in his speech yesterday, he pointed out a lot of things that he would do differently. you know, strongly backing up
israel and more money on the military. opposing various things. as far as foreign policy is concerned, affecting the election, you know, the president's policies have anything to work in the middle east. things seem to have gotten worse over there and i am an independent. i'm not thinking his strong point is foreign policy right now, which some people think is for the president because of the killing of osama bin laden. in my opinion, i think any sitting president would've taken action. i mean, by the president obama did and i think he deserves credit for it, but i think the matter would've been president at that time, they would've made the same decision. thank you. >> okay, i think you make an important point. there is a significant difference on military spending between obama and romney and it was pointed out yesterday.
he said he believed that obama has proposed cuts for the defense budget which are part of the overall sequestration deal is now pending before congress. it would be catastrophic for the u.s. military and romney have suggested putting $2 trillion more in the u.s. defense budget and barack obama at this point. as important to note that we are not actually talking about actual cuts to existing budgets, the scale is so vast it when he talks about the obama cuts, he is talking about going back to the fixed levels of spending. where what many people thought there was a catastrophic were dangerously low level of your spending. in fact, the u.s. and our military currently spends -- and people are astonished about this, something more than 40% of the entire world military budget is spent just by the united states alone.
>> host: the "washington post" looks at one policy in the key areas. defense defense spending is one of them. and it looks like comments made by both president obama and mitt romney, they also look at the tracking poll from last month, thinking ahead of elections. we somehow important spending on the military will be to your vote for president. that was the question asked to respondents. 30% said extremely important and 37% said very important. military spending is very important. 11% said less important. the "washington post" goes through their position and says president obama announced plans in january for a military will curve overall spending while investing in social operations forces and cybersecurity. and they plan on doing so
quickly. he would increase active military personnel by 100 30,000 troops. he has pledged to step up the shipbuilding rate among other measures. let's take a listen to more comments that mitt romney made yesterday. this is his take on president obama's mideast policy. >> america has a proud and strong history, a principal global leadership. a history that has been written by patriots of both parties. this is america at its best. it is a standard by which we measure every president, as well as anyone who wishes to be president. unfortunately, this president's policies have not been equal the best examples of world leadership. nowhere is this more evident than in the middle east. i want to be very clear, that the blame for the murder of our
people in libya and the attacks on our embassies in so many other countries lies solely with those who carry them out. no one else. but it is our responsibility and the responsibility of the president to use america's greatest power to shape history. not only from behind. leaving our destiny at the mercy of events. unfortunately, that is exactly where we find ourselves under president obama. >> host: that is mitt romney outlining his foreign policy strategy and criticizing president obama on the middle east. susan glasser, what can the president do differently? >> guest: if you take him at his value and listen to his rhetoric, he suggests a much more muscular assertive stance, he has the idea that he will get out there and in effect, help people with what to do.
my question is what happens when they say no, and that's where you really live up to understand what kind of thing is he going to do, how is he going to have it when his effort to carry the american agenda doesn't produce the results that you want. obama has had to have it quite dramatically. what happens is our candidates get out on the campaign trail and there tends to be one critical opponent, whether it is the incumbent or the previous president on foreign policy. for example, george w. bush, he went and said that bill clinton was absolutely and completely wrong. he personalized our relationship with russia. that is a disaster and i'm going to be a realist and i am going
to think about america and we will have a whole new idea. he looked into his eyes, vladimir putin and said [inaudible] defense collide. inbox changes. barack obama said he's going to sit down and negotiate with our enemies as well as her friends. and who outlined the new policy of engagement. reality simply did not permit it. he is running on many of the supporters of barack obama of 2008. >> host: here is the latest cover of who won the great recession. we will talk more about that this morning in a few moments. but first, here's a question coming in from tony on twitter. should a new approach be tried. for your answer, would share
with the audience, one of your jobs as a co-chief along with your husband, peter baker, as part of the region of the world that you know well. >> guest: yes, we were there during vladimir putin's first term in office. and we got to see the shaping of what has become today's russia. you know, what's interesting is that the president comes in and he talks about russia policy and reorienting it. there is a consistency, which is to say that the russian national interests and u.s. national interests do tend to ultimately dictate, even if the rhetoric is more icy as it has been an vladimir putin came back to the presidency, remember he criticized hillary clinton and said she was interfering in the americans were trying to overthrow him and there has been
a chilling relations compared with the quite firmly dealings that obama had with dmitry medvedev. it's hard to imagine a major shift in directions. clearly, the russians have listened to the rhetoric and they understand that islam and has won the election, that is the extent and it is in their interest, for example, to continue to cooperate with the united states when it comes to allowing the northern distribution network to continue to sensitized to afghanistan. not because they like united states so much, but because afghanistan is a terrible problem that the borders of russia. it is a major source of all the drugs that flow through central asia and on into russia. drugs like heroin don't come to the united states, it's a plague on central asia and russia.
you know, i think that is the kind of cooperation that is much more by national interests and the leader of the u.s. or russia. >> host: we have kathleen on the phone from hammond, indiana. >> caller: good morning, how are you? >> host: i am good. >> caller: my head is spinning. i saw romney's speech yesterday. i just don't understand between the debate in this speech yesterday that people do not understand what a phony liar and opportunist that he is. i have a nephew who is a marine. okay? god bless him, he fought for our country and romney in line, first off, let's get something really clear here. once and for all.
as far as they sequester goes, it is not obama's name, okay? it was congressman paul ryan and their thing because they were too immature to act like grown-ups and make a deal. okay? obama had nothing to do with it. it was paul ryan and the congress. let's get that clear once and for all. >> guest: i do think that one of the issues that people are going to be making is the question of leadership at large. that is why we hold a lot at hand governor romney about leadership and what kind of a role for america and the world is obama suggesting, and by extension, but leadership is playing out here at home in guiding and shaping how we use our national resources. i do think that the polls might not register that significance in particular foreign-policy issues, but when it comes to that broader question of
leadership, that is a part of what people are going to be talking about in casting their votes on. and there is an opportunity as romney's team has identified to suggest criticisms of obama as a leader. >> host: president obama was in california last night at a fundraiser and commented on mitt romney's foreign policy speech. let's take a listen. >> governor romney has a different view. he says with a tragic day in the war in iraq. he doubled down on that we've today in his speech. he said that ending the war was a mistake. i disagree. bringing our troops home was the right thing to do. [cheers] [applause] every great american weyers the uniform of this country should know that as long as i'm commander-in-chief, we will sustain the strongest military the world has ever known. and when our troops take off their uniforms, we will serve them as well as they have served us. [cheers] [applause] because nobody has fought for us
that you have to fight for a job or a roof over their heads when they come home. >> host: president obama on the campaign trail last night. susan glasser? >> guest: does not obama is making an interesting point. i think his analysis isn't quite fair. romney wasn't saying yes, we want to continue the war in iraq, he was criticizing obama for not being able to come to an agreement with the government on a continuing u.s. military arrangement with the iraqis. he wasn't saying let's keep fighting in iraq indefinitely. that being said, it is a strong point for obama that he has managed announced they withdraw timeline, that is something that is broadly supported by americans than it is wide romney is engaged in a delicate part of
this. without actually going no one is suggesting, and therefore, i'm going to be using this goldplated military that we are talking about in all sorts of different situations. as romney has not talked about afghanistan much during his campaign. the bottom line is that even his own party, americans gladly supportive of the policy that obama has received two and those conflicts in the middle east. >> host: we have a twitter follower who wrote, you will not find universal agreement. what is your penman >> let's go to larry.
>> caller: hello, how are you? first i want to say that they romney is a [inaudible] that i've ever met. i am retired. we don't need that much money going into the military. we got more than enough and being in supply, we have wasted an abused woman being you could possibly imagine. trust me. secondly, i don't think these little skirmishes over the middle east area and in africa have anything to do with the american people as far as knowing exactly what was going on all the time. too much information on false information is what starts the whole thing. think of the republican party needs to pipe down and what they are doing is making us look like idiots on a global scale.
>> guest: it is an interesting perspective from someone who has served in the military. i have one issue that i think democrats have used and that is to point out that romney's increases in defense spending are actually not being supported by the military itself at this point. he is, in some areas, asking for military spending. of course, you are familiar with that phenomenon when it comes to capital every year. the defense budget is the only part of the budget comes up capitol hill and other members of congress with more money in it. the rest of the budget doesn't happen. so they have a political advantage. >> host: the next question is president obama says the military doesn't seem to realize that the military is supporting romney. >> guest: my guess is that obama is pretty well aware of what the
percentage of military voters are going for. >> host: we have another caller. >> caller: good morning, i would like to say that i really don't like this domination -- and this is what my opinion is -- that i feel is going on -- i feel like when we descended into israel, we did so with the people. another way and i believe that has ever been a belief in religion. but this time i'm going to say, too, the christian part of her obama's history. they made him denounce fatter than they say he is a muslim. i believe he's christian. i've been to his church. and i believe that is what he believes in and i was christian and i converted to islam because i fell for women because it was more protective of their traditional roles of father and mother were the mother was allowed to be at home and have children with a protection of the father. and i thought it was a very positive situation for
democracy. israel, i don't think we should follow their lead. they do not follow the christian approach. when things happen to them, i believe that's going to be a problem for americans in the future and we need to make their own decisions, even if israel says they are going to withdraw their support from all of these things because i think they are divine people and i think that his religious falsehood and i feel that americans do not have to follow that abraham was for all people and he was for all peoples children.
>> host: what do you think? >> guest: there is no question that we are talking about the middle east. the question of u.s. support for israel has been politicized by this campaign. it is important to remember that it is a pretty broad centers across the united states. and there is a unified approach to stopping the challenge. why are we -- democrats and republicans, involving not? because the iranians have said that they wish it was close to an existential threat that is threatening the jewish state in the middle east.
the bottom line is that is a pretty tough neighborhood of two living. it is far greater than what we have faced before, and you won't really see any significant difference between democrats or republicans when it comes to that. of course, there is a conservative leader, benjamin netanyahu, he has said that he was born speaking republican, clearly he is much closer politically to the republicans in the united states. when it comes to even potential military strike, you have a different view is on the question of tactics. what is the most effective way, what would you get by a military strike.
what if you wanted to strike and if it means putting off the iranian nuclear program, how much we suck at israel's position in the world. essentially, the united states as well. those are the factors that are being debated very vigorously behind closed doors when it comes to the threat. but in a broad sense, whether it is democrats or republicans, you're not going to see a real shift away from that relationship of israel and the united states. >> host: they are looking at mitt romney's foreign policy speech yesterday. some say they feel that he says what he would do differently. gene washington right in the "the washington post", same speech, at different points. it sounds an awful lot like obama's. one of our twitter folks says that it might be more muscular but offers nothing different than obama's policy.
>> certainly come a more muscular rhetoric has been a theme of romney. some people expect them to be exercising this in the election, in reality, i think there could be some real differences in how romney and obama approach the world. but i don't think this campaign were yesterday's speech has actually flesh out what those would be. >> host: robert is in connecticut. hello, robert. >> caller: good morning. i studied up on policy for a while, for a long time now. i have gone to international events and what i am hearing and seeing are two different things. what i see on tv is the false
lies, misinformation, stuff like that. i have also served in the military. i just went to new haven connecticut with my good friend stanley heller, he runs a website called struggle.org. he interviews all kinds of people. i was down there making people aware of the massacre that happened in beirut in 1982 where soldiers when not been murdered 7000 people, cut their ears off, stole their jewelry, palestinian refugees. so i don't hear anything about this. this is really making me feel unsafe. [talking over each other] >> host: what makes you feel unsafe. >> caller: i never give a perspective of a peaceful loving person. always someone with a motive. >> host: susan glasser is the editor-in-chief of foreign
policy magazine. so this guess brings up the idea of peace. wanting to see more peace around the world. >> guest: that is an important thing if you step back. is what this letter shows. frankly, we were talking about this before, but think about the obama 2008. i was surprised to see it for your sweet or he is running on a campaign where he has been reported to assassinate american citizens in yemen.
with afghanistan, obama has touted this as one of his major foreign policy efforts. he is not exactly a pacifist. on friday we will have the annual award of the nobel peace prize. and barack obama gives a very surprising speech in which he talked about the needs for war in this modern day and age. and i think it is addressed that broadly speaking, americans are a fairly militaristic country. >> host: susan glasser, tell us about this cover. who runs the great recession? >> guest: there is a lot of talk
in the election year where it has been all about the economy, more or less, jobs, jobs, jobs, and a lot of talk about not only the ongoing crisis in europe, but the softening in the economies in china and india. there has been a lot of angst about the global economy. so we thought we should take a look back, take a step back and say, well there has to be winners, right? in every process of the people. call it crude instruction committee will, find ways to benefit or to take advantage of new opportunities. so we have ascended a very interesting aspect of some of the actual winners and we hear a lot about the losers. who has been the big winner. hollywood has actually turned out to be a big winner.
those revenues are up hugely over time while sales in north america are declining. they have gone global. they have even managed to make inroads to markets like india, which i can tell you are very resistant and have their own homegrown restaurants. mcdonald's -- what have they done? there stock is up 500% over the last decade. why? again, globalization, they have figured out that you don't actually need to sell american stocks were cheeseburgers and sodas. the kids in india and indonesia can make millions. ..
>> i watch on the stand ofacac various congressional deliberations on public policy and also information that is put out by the various think tanks here in washington d.c. i'd like to watch the main interview by brian lamb on sunday said it a clock, where he hosts different authors and has discussions about the books that they have written. and so, it's an easy way to get information in those books without having to read the books.
>> house speaker john boehner campaign for mitt romney. he told campaign supporters that with their help, republicans will keep control of the house this year and that he plans to run for speaker again. the campaign novice in new hampshire, this is 10 minutes. >> or any member of the congress, whenever 89 freshman. send them back. [applause] you know, nancy pelosi is working hard. and even though we won 65 seats in the democrat over the last two years, she only has to win 25 seats to get my job back.
let me tell you why. the only way she's going to get to that gabble is to riot out of my cold stone hands. [cheers and applause] now you heard people on the political circles talk about the coming election over the course of your lifetime is being the most important election of their lifetime. we'll guess what, they were wrong. the most important election of our lifetime is going to happen this november because the american people can't handle four more years of barack obama's economic policies. his policies have failed. it actually made things worse. and as a result, they can't run on his record and so they're going to try and run on everything but the record. now last wednesday night, i thought governor romney did a great job. [cheers and applause] and it's pretty clear to me that he worked hard during his practice rounds to make sure he was on the ball.
when the president, you know, had sent inaccuracies, governor romney was able to point those of respect fully and politely and lay the facts in front of the american people. the other thing if you watch the debate closely is that governor romney continued to come back to the economy, come back to the economy and come back to the economy. why? because the american people vote with their wallets. this is an election about getting our economy going again and getting the american people back to work. mitt romney has created hundreds of thousands of jobs. he understands how to create jobs. he also understands the way government can do to destroy jobs in our country. and so, having him out there with this plan in talking about his plan on staying focused on this plane is exactly what needs to happen. or as i like to say, he made the sale the other night and he made the sale and a big way. [applause]
you know, there's a big grandpa that came out today, battleground poll circuit democrats and republican pollsters who do these together. 73% of the people in the battleground poll, the gallup poll this morning from the 72% of the people who watched the debate thought that mitt romney won. [applause] how about this. have a 63% of the democrats who watched the debate thought i romney won. [applause] lausanne, and just to make a guy make a guy with the big shot. a lot of you probably democrat 11 brothers and sisters and my dad owned a bar. i'm the last guy in the world who want to be a member of congress, much less the speaker. you know, i like all of you grew up in america, a country we can be anything you had to be and do anything you want to do. i was lucky enough to work myself through school at miniview, was able to get into a small business and grow into successful business.
along the way i got to know my neighborhood homeowners ossetian and ended up for speaker of the house. this too could happen to you. but i got involved because i thought it was time for people from the real world to take a more active interest in our government. when i went there as a small-business person 22 years ago, i went to favor the smaller, less costly and more accountable government. i'm up to one bit differently today about who i am or why unfair to fight for a smaller, less costly, more accountable federal government. let me tell you what -- [applause] we live in the greatest country the world has ever known. why? the americans about the freedom. the freedom to succeed him in the freedom to innovate, even to try and yes, the freedom to fail. but the freedom to serve our country well and has created thousands and millions, if you, opportunities for all our citizens. none of us to be here today if
we didn't live in a country like this that provided opportunities for all of us. those of us selected and those of you in this room, our job is to make sure these kids here have the same -- look happy. we want to make sure these kids are the same opportunity we having to do that come in chinese we need an economy growing and creating opportunities for all of our citizens. god bless you. keep up the great work and god bless america. [applause] [inaudible conversations]
the centerpiece of my life was the vietnam war. i was there the day it started. i love the first bombing raid against north vietnam. i was there the day had ended and i was therefore everything in between. 10 years in vietnam, aerial combat and torture. i know things about the vietnam war better than anybody in the world. i know some things about the vietnam war better than anyone in the world. and i know how government, how american government can be -- can be courageous and how they can be callous. and that's important. that is one thing i am an insider on. i was the leader of the
underground of the american pilots, who were shot down in prison and north vietnam. you should know that the american character is swayed in those dungeons by those fine men was a thing of beauty. i look back on those years as the beginning of wisdom, learning everything a man can learn about the vulnerabilities and the strain that our hours as americans. why am i here tonight? i am here because i have in my heart what it takes to lead america through tough times.
i expend much of his presidency making sure the military didn't get out of hand. he was only partially successful. they kept military spending about steady. that was hard to was hard to do in the 1950s. what tremendous pressure we created this whole nuclear arsenal. ike patted his own service, the army, really cut it in order to have the money to buy the missiles that was not an easy thing to do. military spending was 70% of the federal budget. today it's 25% i think. >> former president clinton was in las vegas campaigning for president obama. he was joined by senate majority leader harry reid and shelley berkley. this is 50 minutes. [cheers and applause]
[cheers and applause] [cheers and applause] >> you know, we are here at las vegas springs. this is where it all started. [cheers and applause] i spent considerable time the last few months on some of mitt romney's considerable shortcomings. [cheers and applause] but today i am not going to dwell on that. today i am going to spend my time, my allotted time to talk about barack obama. [cheers and applause]
i am happy to do that because i is seen with my own eyes, as you have, how barack obama, president of the united states has changed america for the better. [cheers and applause] now, i'm going to talk just about a few things. i remember that first congress. the first legislation we passed. it was in a state, but we did it. it was the lily let you legislation. [cheers and applause] with women who do the same work on more equal claim than men. that is fair. now, also what we did under his guidance and leadership, wall street reform. so make sure that those big, big
banks can never again due to s. what they did to us before. we also did something that is a real battle, but we won that battle. we took on the credit card companies. [applause] no longer can they can't see without notice, no longer can they raise interest rates without any notice. they have to follow the law we passed under president obama's leadership. [applause] the american recovery act. now, had we not passed back, we would not be talking about getting out of a recession. we would still be in a depression. [applause] even though mitt romney said, let them go bankrupt, president obama said, and we agreed, let's say just.
[applause] more than a million jobs. now, renewable energy. let's talk about that a minute. we have to wean ourselves from these fossil fuels and we are doing now. under the direction that we received from the president, we pass legislation that allows renewable energy projects stupors the. just last week here in nevada alone, two major projects, both very close to where we are standing today that will electrify more than 350,000 homes. that construction is going to start before the end of this year. [cheers and applause] is a thousand jobs in addition
to the jobs going on as we speak in other places in nevada. i flew in today. i sought out that huge project under construction there and sometimes, if you want to take a little drive, doesn't take long and you'll see it come as you from railroad, your com seven or eight miles to dry lake. right there, there is more than a million solar panels that are now they're reducing. [cheers and applause] those solar panels go on for miles. we have now the largest -- we have a huge wind farm. geothermal, we lead the nation in geothermal production.
[cheers and applause] and we did something that is historic. health care reform. [cheers and applause] no matter how much donald trump and steve went complain about it, it is good for the american people. [cheers and applause] no longer can insurance companies cancel you for no reason. no longer can you have lifetime caps. you get sick, doesn't work anymore. that's gone. preexisting disabilities no longer. what this legislation does, he says by the year 2014. that's not very far from now, states all over america and emphatic of credit to the governor for that, are setting
up these exchanges. we are going to have the ability of people in america, people in nevada today to have the same kind of insurance that i as a federal employee has. [cheers and applause] that is what the legislation is all about. in the same legislation, we extended the lifetime of medicare for almost 10 years. we took $800 billion away from the providers, insurance companies and give it to people who need medicare, senior citizens. now the doughnut hole is almost filled. we now have on this check it her free for senior citizens. this is all part of the health care bill. [cheers and applause] the money that we check out of medicare went from the insurance companies and hospitals to the people who needed the patient.
[applause] president barack obama ended the war in iraq. [cheers and applause] president barack obama didn't talk about it. he eliminated osama bin laden. [cheers and applause] president barack obama chose the best secretary of state the united states has ever had, hillary clinton. [cheers and applause] tax cuts, tax cuts for 98% of all americans. [cheers and applause] that isn't something that's going to happen. it's already happened. and as we now, unemployment now is that its lowest rate in a long time.
long, long -- it's the lowest it has been since president obama took over this disastrous economy that was left to him by president bush. now we are not where we want to be. we are not where we want to be, but we have made progress. [cheers and applause] ece, president obama cares about 100% of americans. and you would never, ever hear president obama in a private meeting or a public meeting, as mr. romney said, with all these fat cats, romney told them how he really felt. how he really felt is that 47% of americans don't matter. so, i am going to bring to the stage in just a minute president
bill clinton. [cheers and applause] the history books are already saying one of the presidents this country has ever had. a man i can vouch for this is watch where the disloyalty. i so admire him. one of the great honors of my life is to be able to stand by his side as i did for eight years, working with him to make america great. and what we are working on now with president obama is to return america to the series, where we are economically viable, socially viable and progress is being made. we are not where we need to be. but with your help, president obama will carry that ball back to where it was before bush took office.
[applause] in addition to calling the president appear in just a minute, i'm going to call shelley berkley. shelley berkley i need. the united states senate needs shelley berkley. [cheers and applause] the united states of america needs shelley berkley. [cheers and applause] she has stood with me since she was a teenager. as student body president, university of nevada las vegas. she has been with me during the time she was the nevada state legislature, during the time she was on the board of regents and for 14 years as a member of the united states congress. it is my pleasure to introduce, president bill clinton, congresswoman shelley berkley.
friends, our senior senator, the majority leader of the united states senate, the man from searchlights, senator harry reid for being here and always doing the right thing for nevada. [cheers and applause] .. my father was a waiter on a waiter's salary put a roof over 0 our head, food on the table, clothes on our back, two
daughters through college, not so bad on a waiter's salary. [applause] having grown up in the middle class family, i understand what is at state for nevada's middle class families that are working hard and playing by the rules. as a first person in my family to go to college, i understand what is at stake for thousand of students who rely on student loans and pell grants in order to pay for school. [cheering and applause] and that's why as your next united states senator, i will continue to stand up and fight for nevada students to continue the president -- in educate the gateway to opportunity. [cheering and applause] across our most beautiful state, we have an abundance of sun and wind and geothermal.
that's why i stand up and fight for our clean energy entrepreneurs and workers who are making nevada the clean energy jobs capital of the united states of america. [cheering and applause] and when it comes to our seniors, who have worked so hard their entire lives, i stand up and i fight so when they retire, we can have dignity and peace of mind knowing that their medicare and social security will be there for them in future generations. [cheering and applause] education, energy, veteran's benefits, medicare, social security, along with women's rights and welcome is what -- [cheering and applause] that's is what is at stake this november. on issue after issue president obama is moving us forward by rebuilding an economy that
ensures that all americans who work hard, play by the rules, students, parents, hard-working men and women in nevada can build economic security and live the american dream. [cheering and applause] president obama's message to the people of the state of nevada is middle class families, he's got your back and so do i! [cheering and applause] let's exam the other side -- [laughter] mitt romney and my opponent -- [booing] and my opponent dean heller -- the message for the hard working families of invest, buddy,
you're on your own. the romney-heller agenda would gut investment in education, pell grants, college tax credits, roll back federal student loans and let the big banks back in to the business of student lending so multimillionaires can keep their ridiculous tax cuts. [booing] romney and heller would double down on wasteful taxpayer subsidizes to big oil companies already making record profits while they're slashing investment in clean energy right here in the state of nevada. clean energy that creates god paying jobs that can't be shipped overseas. [cheering and applause] [laughter] to our seniors, i don't know if we have any seniors here.
[cheering and applause] they would sled the guarantee and medicare and social security give us by letting insurance insurance companies and wall street undermine your health and security. i won't let that happen. [cheering and applause] and when it comes to health care and women's rights, someone needs to tell them this is the year twoafl and not take us back to the 1950s. [cheering and applause] [cheering and applause] instead of working, -- what was that? [inaudible] instead of working to provide opportunity for middle class families, so they can put food on the table, pay their mortgage, put their kids through school, romney and heller support the top down
trickle-down approach that provides massive tax breaks to corporation and the wealthiest among us. that's the side of romney, paul ryan, and dean heller for america. we need to tell them in november it doesn't work for nevada! [cheering and applause] [cheering and applause] with cannot let them win in november so they can roll back the progress we have made. we have to move forward with president barack obama create an america that works for every american, the way we did under president clinton. [cheering and applause] [cheering and applause] [cheering and applause]
where people paid their fair share, we built up record surplices, and enjoyed prosperity along with the 23 million jobs this man helped create. [cheering and applause] so starting october 20th, when early voting begins, let's -- [laughter] let's all of us including you let's all of us get out and vote and let's keep moving forward! [cheering and applause] [cheering and applause] [chanting] [chanting] but if you need anymore inspiration, any other reason,
or any -- to get people out to vote for our team, i want you to look around and remember this moment. i want you to listen to someone who has been there making the tough decisions. but is always standing in our shoes and understands what we're going through. that's leadership. that's vision. and our next speaker understands this just like our current president does. the importance of always standing up and fighting for america's middle class. [cheering and applause] i want you to join me in welcoming to our great state of nevada, the 42nd president of the united states, bill clinton. [cheering and applause]
[cheering and applause] [cheering and applause] >> thank you! [cheering and applause] let's hear it for shelly! come on! [cheering and applause] thank you. [cheering and applause] [chanting] >> are you going elect her as your next senator? [cheering and applause] are you going to send -- to congress? [cheering and applause] [chanting] folks, and you better send me to -- because you know why i'm sorry deena couldn't come today? because whenever she's with me she got a bigger southern accent than i do. [cheering and applause] and i feel right at home. [cheering and applause] look, i am grateful for what
senator harry reid said. i thank shelly for her remarks, i thank -- steven -- i want do you elect them because president obama needs some people in congress that are also committed to build a 21st century american middle class and one that lets poor folks work their way in to the middle class. [cheering and applause] you know, it was amazing, i was thinking, i was sitting here trying to contrast in my mind governor romney's account for the 47% of americans that don't pay income taxes, 60% of whom work 40 hours a week and have children in their homes. and until this republican congress and this nominee and this campaign, we had broad
bipartisan support from democrats and republicans with a proposition that if you work 40 hours a week and you have children in your house, they ought not to grow up in poverty. [cheering and applause] that's why gerald ford signed the earned income tax credit and ronald reagan said it was the best -- it took over 2 million children out of poverty. that why i started the child tax credit, and when president george w. bush cut the taxes for high income people, at least he doubled the child tax credit. and when president obama became president, and we were losing three quartering of a million dollars a month, he increased the earned income tax credit again and did something we want dotted is not cap it at three kids. if a working family had five kids, they could get more help. [cheering and applause] in other words, this was a
bipartisan american commitment until now. now you know, we're a bunch of slackers, us democrats. [laughter] shelly berkeley waiter daddy who worked hard to help her. john's story. steven's story. i was in northern california before i came here with four candidates for congress, two incumbents and two challengers. just think about this. it's kind of like you. like america. [cheering and applause] so i'm standing there and one of them, john is a farmer. the grandson of an immigrant who was my deputy secretary of the interior, and still is a farmer. and has now ten grandchildren.
one of them, and works that farm still. one of them, jerry was for 25 years a maker and seller of wind tour boin. -- turbine. he was for wind power before it was cool. he ran for congress because after 9/11 his son said i can't let it go. i'm going go in to the military and serve my country. other people did it for me when we were attacked. [cheering and applause] and so he gave up his lifetime job promoting wind power and went in to the congress and became the principle author of the bill to help returning veterans who have brain injuries get proper care because that were exposed to roadsides bombs and when they comb home they need help to get back to function where they can be fully functioning statistic again. one of them was an
indian-american first generation immigrant, working the way through medical school and spent 17 years working in the free clinic and being involved in public health and commitmenting himself to women's healthy. as he said, we have enough trouble in health care getting it to poor people. we don't need it to restrict women's health care choices. they are smart enough to make that decision themselves. [cheering and applause] oh, and then our last candidate was the son of my grant farmworkers who worked his way through college and graduate school and got a job at livermore laboratory. and not only worked on decommissioning nuclear weapons in the former soviet union but on the new imaging technology that enables us to detect breast
cancer center and saving countless women's lives because he did that. [cheering and applause] it gets better. all this time since he was a little boy, and his siblings were making a living as farmworkers. he wanted to be an restaurant. he was turned down not once not twice, but 11 times on the twelfth try they said yes. he's been to outer space. the international space station. [cheering and applause] i think the democratic party, if you listen to shelly's story, steven's story, if you hear the story about coming here from the south, if you listen to harry reid's search light story, if you think about all these people, we all just started as people. and we got in to politics because we thought the purpose of politics was to make it
possible for people to pursue their own dreams. [cheering and applause] because we know that the most successful societies on earth today are not the ones which pit government against business. we're working together to do what each does best to empower everybody to succeed and share prosperity. [cheering and applause] and that is the difference in this election. [applause] you know what i know what everybody says when president obama said i should be secretary of explaining stuff -- [applause] a., i was flattered. but the problem is, you know, at my age and hillary clinton having a traveling job and all, i'm -- [cheering and applause] i'm hope alone a lot. i have time to figure out stuff.
i had a different reaction to the debate than a lot of people did. i thought -- wow. here's moderate mitt, where have you been, i missed you the last few years. [applause] but i was paying attention the last two years. and it was like one of these bain capital deals, he's the closer, he shows up and doesn't know about the deal. tell me what i'm supposed to say to close. the problem with the deal is the deal was made by severe conservative men. that was how he described himself for two whole years until throw or four days before the debate they said this ship is sinking faster than the titanic -- [applause] people are frustrated by the economy. they want to fix it yesterday.
show up with a sunny face and say i didn't say that stuff i said the last two years. i don't have that tax plan i had for the last two years. [applause] you've going to believe me or the lying eyes here? come on! what are you doing? [applause] and if i've been the president i might have said, i hate to get in the way of this. i misyou. [laughter] the last two years, i missed you. i could have used you in the health care debate while i was trying to enact the national version of the massachusetts law and you were condemning what you had been for. [applause] and i -- miss you. now this election, they got two things going for them. they hope you have amnesia. [laughter] and they know you're generally and generally anxious for things to keep getting better.
and they have that citizens united court decision, which essentially put a for-sale sign on the seal of the united states of america. and i recommend we send -- a loud and clear signal that the future of the united states of america is not for sale. [cheering and applause] look -- [cheering and applause] here's the deal. so let's go back to the cumbersome thing that no great rhetoric can erase math. and let's not forget where we are, the number one thing we need is more jobs. more good jobs. pay enough to raise your kids and allow people to start buying homes again when they come up for sale and really start making this country work again. and then we need an education
system that people can afford to be a part of that will educate and train people for 21st century jobs. we need a banking system that will actually fund new imreerps and people willing to take their new idea and make a risk and create the new opportunities. so let's just think about it. , and look at the score in fifty one or fifty two years now, through 28 years of republican presidents and 24 years of democratic president we had 66 million new private sector jobs, 24 of the republicans, 42 under the democrats. [cheering and applause] and when president obama took the oval office we were losing over 700,000 jobs a kept. we kept losing jobs for a year while we waited for the recovery act to kick in. in the last 32 months, we have gained 5.3 million private sector jobs.
[cheering and applause] and that's two times as many jobs as this country had in the seven years between the end of the little dot-com session in 2001 and the beginning of the financial crisis. they complain. stop blaming president bush. we won't. we will say it happened out of thin air. waiting with even if you don't count that, even if you don't count that why knob -- nobody thinks president obama. the republicans blame me for it haven't figured out to blame somebody who wasn't even there yet. so let's not blame anybody for that. if you forget about that and the recession in 2000, in seven years their policies, which the current nominee of the republican party wants to go
back to created less than half as many private sector jobs that has been created in the last 32 months under president obama. [cheering and applause] this is just matt -- math. and did you see the -- like the republicans did after the last night unemployment rate came out at 7.8%. i was embarrassed for them. weren't you? [cheering and applause] they were wining and mowning it -- mowning it was a grant conspiracy. they took the numbers. keep in mind, you heard them at the convention. they must have talked about the unemployment 65 or 70 times at the convention. as long as the numbers were above 8%, those numbers were just like the ten commandments
moses brought down from sinai. [cheering and applause] they were carved in stone. immutable and true forever. once they dropped below 8% there were sick conspiracy who invade -- [cheering and applause] now you can understand why because senator reid's partner said two full years before the election their number one priority was not to put america back to work but put president obama out of work. so a big part of their strategy was to keep unemployment above 7%. that's why they wouldn't take the jobs plan. that's why they were 700,000 more teachers and firefighters and police officers and nurses all over this country who have been laid off by state and local governments that were flat
broke. and you know, you are to feel some sympathy with them. they work so hard to keep unemployment above 8%. they got within two months of getting the job done. [laughter] it almost makes you want to cry for the disappointment they face. [cheering and applause] [cheering and applause] america is scattered with all of those heart broken teachers, firefighters, police officers, and nurses that would be working if we had a normal democratic policy that would have done that and unemployment would be under 7% it would be under 7% today if the jobs plan passed. [applause] you have to give it to them, they fought hard for it. and they got the job done until just right here a month before
the election, they almost got there. [laughter] and you -- we have all been there. we worked our hearts out for something and we didn't quite get it. we almost got there. and it's heart breaking. [laughter] it really broke their hearts to see unemployment drop. i want a president and congress that loves it when unemployment drops. [cheering and applause] [cheering and applause] i want people who believe that putting people back to work is just as patriotic as supporting our troops in uniform. i want somebody who understands -- [cheering and applause] [cheering and applause] that we cannot be strong in the rest of the world unless we rebuild the 21st century american middle class and let the poor people work their way in to and we do it as quickly as possible. i want somebody who says aye every time the unemployment rate
drops. [cheering and applause] [whistling] >> i want somebody who sees your faces and your children and your grandchildren's faces every time the unemployment rate drops. [cheering and applause] [cheering and applause] that's what i want. and i think that's what you want. [cheering and applause] and i want somebody who can win an honest argument on the facts without having the enormous super pac run negative ads full of the fog of politics. [cheering and applause] all of this medicare thing, they're still trying to say what a mean old person what president obama and the democrats are. they ripped off medicare for $716 billion. and really, weird because shelly's opponent voted twice
for congressman ryan's bill and it had the same medicare savings. for the only difference between paul ryan and romney i can figure. i agree with paul ryan and he had to scrap it and attack obama for doing what he did. now look, let me explain this one more time -- [cheering and applause] first of all, the aarp supports the president's position. i don't think anybody believes that the aarp is in the business of wrecking medicare for our seniors. okay. here's the deal. every year or so, a panel of experts doctors and others that deal with all of these services that medicare provides in all the different ways estimates how
much they're going cost not just this year but every year for ten years in advance. that's hard to know, isn't it. it doesn't matter if you're albert ion einstein. it's hard to know. they take new evidence every year and make judgments on it. and they basically said look, there's no way in the world we need as much as your budgeting for the next ten years. and if you don't allocate the money to that, you can allocate it to other things and spending less money alone will add eight years to the life of the medicare trust fund. so instead of going broke in 2016, it will have money until 2024. that's a good thing. [applause] they took the advice and they also used a fair chunk of the money to close the doughnut hole in the senior drug program, which said -- saved the average
senior $600. then they use the rest of the money as governor romney rightly says to put in to the health care plan so that insurance companies could afford to provide insurance to the millions and millions of families with preexisting conditions, and if you don't subsidize it, they're not going to get the insurance because they would go broke. right? okay. that's what they did. that is the highway robbery that governor romney claims they created. the 25% of the people are going to lose their medicare advantage coverage and all of that. now, this is already been done. if they have already started these savings, all right, they're not cutting anything. they're just inplait -- flatting the cost. so we can already tell who is right. because if